Friday brought with it a groundbreaking announcement that has the entire financial world buzzing. The BRICS bloc, already known for shaking things up, has added a new layer to its economic strategy. Egypt and the United Arab Emirates (UAE), the newest members of the BRICS family, have inked a deal that’s not just big; it’s colossal. We’re talking a jaw-dropping $35 billion dedicated to urban development, specifically targeting the town of Ras el-Hekma. This isn’t your average investment. It’s a historic move, marking the largest foreign direct investment in Egypt’s urban development sector to date.
The deal was revealed at a press conference where Egyptian Prime Minister Mostafa Madbouly, alongside Egyptian and Emirati officials, laid out the details. Egypt is opening the door to a new era of urban development, financed by the UAE to the tune of $35 billion. The first chunks of this massive investment have already made their way into Egypt’s central bank, signaling the start of something big.
President Abdel-Fattah El-Sisi didn’t mince words when he mentioned that this investment from the UAE is a clear sign of support and assistance. With this financial backing, Egypt is looking at a much-needed currency devaluation, something that’s been on the agenda for a while. This is about unlocking a door to international assistance that could exceed $10 billion. The ripple effects of this deal are already being felt, with Egypt’s dollar bonds seeing a notable uptick.
Abu Dhabi’s wealth fund, ADQ, is set to purchase development rights to a prime area along Egypt’s Mediterranean coast, known as Ras El-Hekma, for a cool $24 billion. The remaining $11 billion is earmarked for additional real estate and prime projects, showcasing the UAE’s commitment to Egypt’s growth. Payments are being structured in tranches, ensuring a steady flow of funds and highlighting the UAE’s commitment to Egypt’s development.
But wait, there’s more. The BRICS bloc isn’t just focusing on urban development. Russia, a key player in the BRICS alliance, is proposing a series of financial initiatives aimed at reshaping the international monetary and global financial system as we know it. At the center of these proposals is the creation of a new digital BRICS Bridge payment platform, a bold step towards reducing reliance on the US dollar.
The proposed digital platform is envisioned as a multisided option for settlements, bypassing the need for the US dollar. Russia is spearheading this move towards de-dollarization, aiming to convince the BRICS bloc to adopt the new BRICS Bridge payment platform. The Russian Finance Ministry and the Bank of Russia are busy drafting a report that will outline a set of initiatives and recommendations to improve the international monetary and financial system. This includes the development of practical initiatives, with the BRICS Bridge platform potentially becoming a reality by the end of the year.
